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At some point investors have to wonder if they're better off eschewing corporate bonds entirely and instead just investing in dividend-paying stocks of the same companies.

Witness
AppleAAPL -1.5351744876157316%Apple Inc.U.S.: NasdaqUSD124.43
-1.94-1.5351744876157316%
/Date(1427835600323-0500)/
Volume (Delayed 15m)
:
40410221AFTER HOURSUSD124.47
0.0399999999999920.032146588443301455%
Volume (Delayed 15m)
:
1468436
P/E Ratio
16.657295850066934Market Cap
736073426681.742
Dividend Yield
1.5108896568351684% Rev. per Employee
2153110More quote details and news »AAPLinYour ValueYour ChangeShort position
(ticker: AAPL). Last week it increased the amount of the legendary cash hoard it plans to distribute to stockholders by way of a 15% dividend increase and an additional $50 billion in stock buybacks. The company also said it will tap the bond market for the first time ever, using proceeds to help fund the payouts.

Why would Apple borrow? First, it lets the company pay shareholders without dipping into its large overseas cash stockpile and incurring tax penalties. Second, why wouldn't Apple borrow? Money is practically free for highly rated companies right now. Even though Moody's and Standard & Poor's denied Apple a top triple-A credit rating, putting the company a notch lower, at double-A, Apple will surely command one of the lowest corporate borrowing rates on record.

Contrast those bond yields with the same companies' dividend yields. Apple's latest dividend yield is 2.9%, while Nike's is 1.4%. Certainly, those who bought into Apple stock at its $705.07 peak last September now wish they could have bought a simple, low-yielding Apple bond back then. Those shares, and that 2.9% dividend, now look more tempting at a recent $417.20 entry point.

The dividend-as-substitute-for-bonds trade is nothing new—it's become an income-investing fixture as Federal Reserve policy has pushed bond yields to all-time lows. And to be sure, these remain two very different investments. Bonds are by definition more defensive, less volatile. Stocks have theoretically limitless potential for price gains, along with significant downside risk, but dividend payout ratios are near historic lows and could easily rise further, even if some say dividend stocks are already overbought.

Meanwhile, bond prices stand at all-time highs and yields at all-time lows, offering scant room for further capital gains (although that's been said before and proved wrong). Any eventual rise in interest rates will inflict losses on existing bonds issued at lower rates, and that type of interest-rate, or duration, risk is about as high as it's ever been for many corporate bonds. So even those seemingly super-safe bond bets like Apple or Nike could come back to haunt investors. And in the meantime you might not be earning the rate of inflation.

There are a few guides out there to help investors bring bond-market wisdom to stock investing (and we all know the bond market is smarter than the stock market). Citi produces a monthly list of stocks of large companies that combine high dividend yields with top-tier financial health as gauged by the market for credit-default swaps.

Among the 21 U.S. stocks on the most recent list is
MicrosoftMSFT -0.74462890625%Microsoft Corp.U.S.: NasdaqUSD40.655
-0.305-0.74462890625%
/Date(1427835600151-0500)/
Volume (Delayed 15m)
:
33361246AFTER HOURSUSD40.655
%
Volume (Delayed 15m)
:
1460451
P/E Ratio
16.262Market Cap
336027032489.21
Dividend Yield
3.050055343746157% Rev. per Employee
728656More quote details and news »MSFTinYour ValueYour ChangeShort position
(MSFT), one of the last remaining triple-A rated U.S. companies, which sports a 2.9% dividend yield. Contrast that with the 2.31% recent yield on its 10-year bonds, per online bond trading platform MarketAxess. When Microsoft sold those bonds in November, it also sold five-year bonds that yielded 0.99%, marking the lowest-ever yield for new five-year corporate bonds.